The Hindu Business Line : Goodricke to launch cold tea brand by year-end

Kolkata, April 9 Goodricke Group Ltd is planning to launch a ready-to-drink cold tea brand by the year-end, according to its Managing Director and Chief Executive Officer, Mr A.N. Singh.

“We are ready with the new beverage and are currently waiting for the Government’s licence,” Mr Singh told reporters on the sidelines of the company’s annual general meeting held here on Tuesday. The product would be launched in 250 ml bottles in four flavours — peach, lemon, orange and pineapple. The company already has patents for its range of hot and cold-water soluble instant tea and the patent application for the new product is also underway, he added.

The company may need to float a new unit for the launch, he said, because such a product is not allowed to be manufactured at tea plantations, which are export-oriented units. It was, however, not decided whether the brand name of Goodricke or its UK-based mother concern Camellia Plc would be used for the new product, Mr Singh said.

“There is good demand for ready-to-drink tea in the US and the UK and we also see India as a potential market for the same,” Mr Peter A. Leggat, Director, Camellia Plc, said.

Cost management

In a bid to eliminate costs incurred from intermediate brokers, warehousing and other holding costs, the company would try to reduce sales through tea auctions to 50 per cent of total sales against 70 per cent currently, Mr Singh said. The company is trying to approach merchants and global retail chains directly to market its products. “We are looking at reducing 5 per cent of our costs this way,” he said.

Production levels

The company had produced 21 million tonnes of tea in 2008, of which a million tonnes were exported. Black tea was mostly exported to countries such as UAE, the UK, Germany, while instant tea went to other European countries and Japan.

The anticipated fall in exports in 2009, due to a lack of bank credit to importers and delay in shipments, is expected to be offset by a rise (3 per cent) in domestic consumption, he said.

Its other unlisted group companies together produced 8 million tonnes of tea, while 4 million tonnes were outsourced to other tea growers. The company achieved a price realisation of Rs 103 a kg last year and is expecting a 4-5 per cent increase in realisations due to the fall in productivity in drought-affected areas such as Kenya, Srilanka and also parts of India, he said. The company announced a dividend of Rs 3 a share of face value Rs 10 as against Rs 1.5 a share last year.

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